Page 129 - Albanian law on entrepreuners and companies - text with with commentary

PART V
JOINT-STOCK COMPANIES

Comments:

1. While LLCs are typically designed for small and medium sized enterprises which are
financed by a closed group of shareholders, joint stock companies (JSCs) are typically
designed for large enterprises which satisfy their financial needs by offering shares to the
public. Whereas LLCs applies a flexible regime of internal relations and external safeguards,
JSCs are subjected to rather rigid rules of governance and the protection of investors and
creditors due their size and importance for the economic system. JSCs are still subjected to
the rigid system of the Second Company Law Directive on capital contributions and
maintenance. However, we mentioned in above Comments to Article 70 that the recent
regulatory trend in EU Company Law is to liberlize the requirements of the Second Directive.
One of the first results of these reform activities are the amendments introduced by Directive
2006/68/EC which allow for more flexibility as regards the valuation of considerations in
kind, the acquistion of company’s own shares and financial support for this acquisition. As
enhanced flexibility and ‘slim’ 127 regulations have started to dominate both the LLC and the
JSC area, the mentioned focus on directors’ liability can be found in both regulatory contexts.
This is an example of the fact that ‘deregulation’ can never proceed and be successul without
a corresponding ‘re-regulation’ which replaces rigid organizational rules and safeguards by
confering increased liability standards on those who manage and represent the deregulated
entity. The functioning of this system also requires the creation of public agencies which
monitor and control the deregulated market section. Financial Supervisory Agencies are an
example here. Such supervision can only work if the deregulated entity is submitted to strict
rules of transparency requiring disclosure of relevant data through and adequate registration
system and continuous reporting.

2. It is in this respect that it makes very much sense today to stop calling modern JSCs
‘anonymous companies’. It is precisely the ‘anonymity’ of the company and its shareholders
that has been questioned by the various American, European and International legal reform
efforts: in order to create transparent reliable governance structures in JSCs, both the
corporate governance and shareholder structures are required to be disclosed through various
reporting and registration devices. Modern governance guidelines recommend registered
shares to be the exclusive form of shares. But even the bearer shares of JSCs listed on
regulated markets require registration. So the historical term ‘anonymous companies’ should
definitely be abandoned during a modern company law reform even if other countries might

127 ‘SLIM’ was the abbreviation of the first set of EU deregulation initiatives to be applied, among others, in the
company law sector. It stands for: ‘Simpler Legislation for the Internal Market’. It resulted in the reports of the High
Level Group of Company Law Experts, Simpler legislation for the internal market (SLIM): a pilot project.
Communication from the Commission to the Council and the European Parliament. COM (96) 204 final, 8 May 1996.
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